WTO director Lamy hearing what he wants to hear from U.S.

Pascal Lamy, director-general of the World Trade Organization, said he was much more optimistic about the prospects for the Doha Development Round as negotiators approached yet another deadline — on June 30.

Until a few days earlier, Lamy's newfound optimism could have meant only one thing to U.S. farm organizations: European Union officials had finally relaxed their opposition to increased market access for agricultural products.

Instead, Lamy was boasting about a change in tone by President Bush, who seemed to be saying the United States was willing to make concessions; i.e., make more reductions in domestic support to achieve an agreement.

Speaking at a press conference following his meeting with Jose Manuel Barroso, the president of the European Commission, Bush said the United States was determined to complete the round despite the lack of progress in recent months.

“The Europeans have problems with the U.S. position; we have problems with the European position; we both have problems with the G20,” he said. “But we're committed to a successful round. There's a ministers meeting here at the end of this month, and my pledge to our European counterparts is we'll do the very best we can to reach an agreement that satisfies all parties' desires.”

Although the president did not mention support cuts in the June 21 press conference, Lamy said the comments meant the United States was willing to compromise, something Lamy has advocated repeatedly.

Members of Congress, including at least 57 senators who signed a letter circulated by Sen. Kent Conrad, D-N.D., also criticized the president, demanding he reject any WTO proposal that would reduce U.S. supports without increasing market access in the EU.

“An unbalanced proposal that asks U.S. agriculture and rural communities to give more while getting less in market access is unacceptable,” Conrad wrote. “We urge you to direct your negotiators to reject any such proposal and instead insist on an ambitious, balanced result that will level the playing field for U.S. agriculture.”

The new U.S. Trade Representative, Susan Schwab, denied the Bush administration was planning to propose further cuts in subsidies or soften its position on market access. The current U.S. position calls for a 66 percent reduction in tariffs compared to the EU's 39 percent and the G20's 54 percent.

But a spokesman said later that the United States could “adjust” its proposal if the European Union or the G20 developing countries — led by Brazil — offered more ambitious tariff reductions.

Another USTR official also said the United States isn't concerned about meeting the June 30 deadline for completing a draft agreement on agriculture. “The only real deadline is the end of the year,” he said. “That's driven largely, of course, by the expiration of Trade Promotion Authority in July of next year.”

The chairman of the Agriculture Negotiating Group for the Doha Round also released a WTO status text that indicates significant differences remain on a number of agricultural issues. Perhaps Lamy's optimism is unwarranted.